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hey, my man larry kudlow is up next. he even let me sneak in a few stock ideas on to his show. so don't go anywhere. and oh doctor! guess what is on tonight? "american greed," an all new one. a private lending scam ends in debt. pockets millions and leaves investors broke. i've been watching the whole series, and it is awesome. i always say you got to listen to the conference call. i always like to say there is a bull market somewhere. i promise to try to find it just for you right here on "mad money." i'm jim cramer. see you tomorrow. hey, larry, what are you look at tonight? >> all right, jimmy, presidential keystone oil pipeline permit should have come through years ago, is going to come tomorrow. good evening, everyone. i'm larry kudlow. this is "the kudlow report." sizzle story number one this evening. pipeline politics at its worst. in a desperate political move, tomorrow president obama in full pomp and circumstance will fast track the permit for the southern part of the keystone oil pipeline. this should have happened three years ago for the whole pipeline, and it ought to be a
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routine permit without all this political hoopla. we're all over this story. and sizzle number two tonight, mitt romney wins big in illinois. and now the republican party is kohl lessing behind him. former florida governor jeb bush endorsed as did the freedom works tea party. now the most basic question of all, can romney beat obama. but first up this evening, let's get the lay of the land on this whole keystone pipeline. good evening, eamon. >> good evening, larry. president obama calls his energy strategy all of the above and is traveling the country this week in an effort to prove it. today the president appeared at a solar plant in boulder city, nevada, where he defended government investment in solar energy. but tomorrow we'll see him in a very different setting at an oil pipeline storage yard in curbing, oklahoma, where he'll deliver remarks about a new pipeline there that will bring oil to the gulf of mexico. tomorrow's visit highlights the fact that a part of transcanada
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corp.'s keystone pipeline is being approved. and larry, the southern part of the pipeline is being built in spite of the president, not because of him. you can bet they'll call the president's appearance tomorrow nothing more than a photo op. this is going to be one of the hottest political issues of the year, larry, given that high gas prices are one area where the republicans think they smell blood in the water with the obama administration going into november. >> all right. i hear you, eamon. thank you very much for the update. >> you bet. >> so what is the impact of the president's fast track permit plan? here to tell us that is cnbc's own sharon epperson. evening, sharon. >> there has been a lot of controversy about the northern leg of that project. environmental concerns of course are the main factor there. but the southern portion, obama has been very supportive of. and that's going to take supply from cushing to texas.
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that's about 700 extra barrels of day. and the president tell us that will happen by the summer months. that's when they're expecting to start construction. back to you. >> all right. many thanks, sharon epperson. folks, let me give you my two cents quickly. this presidential announcement, pure political grandstanding. the keystone pipeline permit should have been granted three years ago after the first successful state department review. we needle as much oil supply and distribution as possible. unfortunately, the president has fought tooth and nail every step of the way against it. it's left wing environmental politics over our natural interests and our economy. for example, obama policies have damaged drilling on federal lands. that's right. straight from the u.s. energy information administration, that's in the department of energy itself, oil production on federal lands dropped 13% over the past year. natural gas production down 10%. and all fossil fuels, coal, oil, and natural gas have dropped to
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a nine-year low. yes, private production from oil and gas shale skyrocketing. but it has nothing to do with obama's policies. see responsible for federal lands, and we've actually seen a large production drop. meanwhile, new estimates taking account of advanced technologies for shale drilling, suggest the u.s. has 1.4 trillion barrels in recoverable oil buried underneath america and offshore. that's incredible. 1.4 trillion with a t. that is 60 times what the president repeats in his standard stump speech. and as our next guest is going to tell us, if we take the regulatory cuffs off, north america could become the new middle east. his "wall street journal" op-ed is called "move over opec, here we come." joining me now is ed morris, head of global commodities research at citigroup. ed morris, thank you very much. thank you for your column.
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what you say, i want to get your take on this, we can become the new middle east. the only thing that can stop us is political environmentalists get the upper hand over supply and the pipeline. what were you thinking? >> i'm thinking that actually the u.s. is the fastest growing oil producing country in the world, the fastest growing gas producing country in the world. and yes, it's happening mostly on private lands. and that has happened despite whatever politics have been proven in it. >> basically what i'm arguing, get the regulatory handcuffs off. build the pipelines and let's increase our supply. we can do it. it's the we can do it part that i'm asking you about. >> we can do it. we can do it safely. i got to tell you, your data are a little off. of course production has dropped on federal lands. it's all because of a macondo explosion that took place in april 2010. it set things back. but at least puts us in a position where the regulatory environment politics aside, the regulatory environment going forward is going to be one that
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is going to enhance production growth, even on federal lands. >> yes. but you know that part of that energy information report said that we're at nine-year lows. nine-year lows going back to when they started the data, which i think is 2003. i think that's pretty indicting. >> nine-year lows on federal lands. it takes an awful long time to get production up. and those lows are because of a lack of investment over a 20-year period of time through lots of administrations. >> all right. now, you're saying the shale revolution and other activities, this could really help the economy and build jobs. and i love this. i call this the energy mod of economic growth. tell us about that. >> well, there is no doubt that we're seeing an industrial revolution, a reindustrialization of america taking place because of the shale revolution that is taking place because we have the lowest natural gas prices in the world. we will for one or two or three generations. that's going to result in higher petrochemical growth, higher -- actually steel manufacture in the u.s., we're looking between
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2 1/2 and 3 1/2 million jobs being added because of this revolution between now and 2020. >> all right. what is your best advice to policymakers? you have laid out the scenario. we can become the new middle east. this is break through stuff, ed. what is your best advice to 30i8s makers? >> let's let the market work and get rid of the impediments to the market working. we see that now we're the largest product exporter in the world. we export more diesel and gasoline than any other country in the world. we can't get to it the east coast because of imperfections in the market. >> imperfections in the market. okay. well put. ed morris, thank you so much. we appreciate it. now, let me turn to a distinguished democratic house member, peter welch of vermont, old friend of the show. how are you? what i gather is you don't really buy this drilling and pipeline scenario. you're blaming the whole increase in gasoline prices on speculators? tell me it's not true. tell me you don't really hold that view. >> there is long-term factors
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obviously that your guest just talked about. but the short-term speculation is a factor in the futures market has become 80% speculators and 20% ends users. and they really do exploit the short-term situation, iran anxiety right now. goldman sachs did a study. 23 bucks on a $100 barrel of oil speculation. st. louis fed had it at about 15%. so that is a factor that can be like 15 bucks when you fill up your pickup. >> 15% is about right. look. we have very efficient commodity and financial markets. they've done -- you know, we've had trials. they never find anything wrong. but peter, let me ask you this. suppose these evil speculators sold oil and sold gasoline futures and lowered the price because america is drilling more and pipelining more. in other words, in the markets, peter, what goes up can come down. >> it's true. but the way the futures market has been inverted. it's gone from 80% end users like the airlines and the fuel users to 80% speculators.
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in the short-term when there is upheaval like in iran and anxiety about that, they have been able to leverage that to their advantage. the reverse could happen. but bottom line, i'm saying that have the futures market through the cftc be -- bring it back to its original purpose for the end users price stability. >> yeah, but this helps add liquidity to the markets. look, go back to 2008. president bush, a finally after much prodding and urging finally lifted the ban on offshore drilling. do you know what happened? those evil speculators, they saw the supplies coming, even though it was six, seven years out. they sold. the price of oil collapsed. in other words, as any stock market investor will tell you what, goes up can come down. >> that's right. >> speculator is not an evil word. it's just the market trading. >> i'm not using speculator as a four-letter word. the futures market has to be price stability. and there has to be some protection for the consumer. when the president was with
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prime minister cameron and talked about making a release from the strategic petroleum reserve, the speculators did exactly what you said. they brought the price down right away. that's the tool is government could use to be on the side of small consumer to give them a break. >> how much more efficient do you think, the same speculators, if they saw the president really going after drilling on federal lands, offshore, alaska, the arctic, do you know what? even though the projects might take ten years, they would sell, peter. and you would love it. and i would bring you back on the show and say aren't you happy, because the traders, the investors, on the hopes of greater supply, just took down the price. just took it down. and it arbitrages out towards the close end. >> larry, all due respect, you're underestimating how much more production we have had. we have four times more rigs drilling than the rest of the world. it's unbelievable how much has been drilling.
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>> none of it is on federal lands. >> it's up. that's really true. where the drilling is not occurring is oftentimes for the natural gas. so you can't get drilling even though we have this huge abundance of natural gas. >> peter, if you unleashed all this stuff, the latest estimate is 1.4 trillion barrels of oil alone. 1.4 trillion barrels, you unleash that, that includes federal lands as well as private lands, you would see oil prices come down, or at least stabilize as the market and those dreaded investors of yours give us a much more -- all they want to see is more supplies and more pipeline distribution. we would become -- we would become the new middle east. >> and that's part of the all of the above approach. supply does affect the price. no dispute there. but you also need a comprehensive energy strategy. t boone pickens is saying why don't we use natural gas to power our vehicle fleet. >> i'm all for it. >> and we should be doing it. and we should be doing to
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alternative energy and clean energy. >> i just don't want the government to subsidize it and pick winners and losers. you knew i was going to say it. >> i did, but they're subsidizing the oil companies still. >> no they're not. that's not a subsidy. but i would get rid of all that stuff if you give me a 20% corporate tax rate, peter welch. >> i don't know if i can give you 20, but i'd be bringing it down if we could get rid of the loopholes. >> great to see you. >> thank you. we switch to the other big sizzle story of the day. mitt romney celebrated his big illinois win last night, delivered a heck of a strong message for president obama. he calls it the professor. take a listen. >> yesterday i was giving a speech at the university of chicago. not very far from here. not very far from where professor barack obama taught law. as i was writing the speech, i thought to my lifetime of
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experiences. i've had a lot of opportunity to learn about the unique genius of america's free enterprise system. 25 years i lived and breathed business and the economy and jobs. i have successes and failures. but each step of the way, i learned a little bit more about what it is that makes our american system so powerful. you can't learn that teaching constitutional law at university of chicago, all right. >> good line. joining me now to talk about this, two esteemed former national committee chairman, howard deans, former dnc chair, former presidential democratic candidate, and michael steele, former rnc chair. michael steele, you're further away. have i governor dean with me tonight. what do you think of romney's message last night? he is starting to stick to it obama. he is almost defending the moral basis of free market capitalism, which impressed a lot of conservatives. >> right. i thought he gave a whale of a speech. it was very strong.
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and it really started to delineate in many respect what's the upcoming campaign between him, should it be him as the nominee for the gop and the president will look like. and there was also those elements, you know, referring to him as the professor and things like that that sort of went to the base and said see? i'm ready to do this. i'm the guy. come on. let's get on board here. let's move this thing. so i think overall with a strong showing, a double-digit win, a strong closing, you know, remarks at the end of the evening put him in a good position to move forward. he still has to deal with of course his right flank where he had newt gingrich and rick santorum there. and of course there is ron paul. the reality of it is last night was a very good night for the romney campaign. but he still has to push forward to bring that base along with him. >> professor howard dean, what did you think of romney's attack on professor barack obama? >> i don't think anybody pays any attention to that stuff. >> i was watching.
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>> i'm sure you were watching with great attention. i'm sure the american people did not. it's kind of like whatever the remark the consultant made about etch a sketch. nobody is going to vote on that kind of stuff. look, i think it's game on. romney's almost got the nomination put away. i think probably santorum will win louisiana, which will cause another speed bump. but i think romney, as i have all along, romney is going to get the nomination. and then he's got a lot of work to do. there has been enormous damage done to the republican brand in this primary. he is down to 6-1 among hispanics. he is down 20 points among women. you can't win the presidency if either of those holds up. but now romney is going to have a chance to start to consolidate his base. if it happens as a result of last night, which was a very good night for mitt romney, then i think he's got a shot. >> michael steele, jeb bush endorsing romney. now probably jeb bush is the pillar of the republican establishment. i think you would agree, or close to it, one of the pillars. how important was that? is the gop now going to embase
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romney in ways that they haven't up to now? are we going to get all the major office holders to embrace him? >> you know, i think that was more about in one sense getting the money solidified. they're really pushing hard to get the dollars raised, particularly from the major donors who have not necessarily flowed funds to the campaign directly. they have certainly played with the 527s. so i think jeb brings that element to the table, sort of the bush establishment wing of the party. >> i felt like a coronation, michael. sort of a crowning. >> a little bit of that. >> i assume that's going to help. >> let me tell you how it translates. it's good up here. grassroots plays a lot differently. they love jeb. they like jeb a lot. but that does not necessarily mean that those hard-core conservatives, whether they're in florida or missouri or louisiana are going to say all of the sudden, oh, well jeb is on board now, i'll get on board there are still elements of this campaign they want to fight out, and they intend to do that. and that is still going to get
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played out as howard just mentioned. but i think jeb was a significant get for him last night, or today. and he'll use it to mostly raise a lot of money and use that jeb influence. >> professor dean. >> yes, professor kudlow? >> if the romney charge sticks, professor obama, who doesn't understand the real world economy in business, that could be a very interesting riposte that might stick. >> i don't think so. and the reason is he has been president for four years. and the economy is getting better. even you don't deny that. >> it ain't getting better enough. i think it's still a horse race because it is getting better in recent months particularly. >> right. >> but it's still historically low with a lot of unemployment and high gasoline price. >> that's true. gasoline prices are something you ought to worry about it. the fact of the matter is housing starts are up. housing sale republics. >> agreed. >> the market has been really strong for the last year. >> but if the professor teaching constitutional law doesn't
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understand the innards of the economy, could that label moniker hurt? >> i don't think so. and the reason is he isn't a professor. he is the president of the united states. if he were running for office, you could hit him with that. but it's very tough. he is the president. and it's very tough to say he doesn't know what he is doing on national defense, or he might this or might that he has been there for four years. this is going to be a straight-up contest between somebody who has been there for four years and delivering a fairly decent economy at this point against somebody who is attacking him. i think he needs more time. >> we need more drilling on lands. thank you both, gentlemen. next up, a major supreme court agreement with one family's overreaching of the epa. and scouting out new york city. the full report coming up. and don't forget, professor kudlow says free market capitalism is the best path to prosperity. "the kudlow report" will be right back.
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an historic supreme court ruling to knock down obama overreach. the high court rules in favor of one family to fight the environmental protection agency from taking their land. nbc's pete williams joining us us now with the details.
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good evening, pete. >> this has been followed closely by advocates of private property rights. it involved an idaho couple who wanted to build a house near a scenic lake. after they started work on a lot, the epa ordered them to stop and said they could face a fine of up to $75,000 a day. the epa said their lot contained navigatable waters. the couple sued. the lower court said they couldn't come to court until they actually got fined. but today the supreme court said yes, they can sue. there is no reason to think the clean air act is designed to let regulatory agencies like the epa strong-arm landowners into, quote, voluntary compliance. part of the reason this case got so much attention is the epa's declaration that the homeowner's lot contained navigatable waters. it was very close to the lake, but other lots with buildings were closer. and in announcing the decision today, justice antonin scalia said the couple did not think their land contained navigatable
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waters, having never seen a ship cross their yard. it's a victory for small landowners, but it will apply equally to big landowners and corporations because they'll now find it easier to sue when they get notices they're not complying with the law. one was filed by general electric, a partner of cnbc. and i should also say, larry, this decision today was unanimous, 9-zip. >> did this couple pay any of the $75,000 a day fine? and did they get their money back? >> no, they didn't have to. but what they said is we shouldn't have to pay the fine because we don't think we're not in compliance. we should be able to challenge the declaration that we're out of compliance, that we're violating the law before we ever have to get to all that we shouldn't have -- we shouldn't be forced into complying. >> and that's what they want. >> exactly. >> that's one of the things they want. >> right. >> all right. nbc's pete williams, thank you
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very much. and i say good on that idaho couple. now a breaking story out of toulouse, france right now. french security forces reportedly storming the home of the islam nick jihadist who confessed to gunning down three innocent children, a rabbi and three french soldiers over the last week. 23-year-old mohammed merah claims to be al qaeda militant who spent time in pakistan and afghanistan. french police admitted today he had been tracked for years, but he was not considered a threat. there are also threats here at home. the new york police department, nypd, their head of intelligence testified before congress today. new york city may be iran's number one target. that's right. at the same hearing, congressman peter king says iran has hundreds of agents here in america. incredible. let me bring in wnbc's jonathan dienst who has been working this story. good evening, jonathan. >> good evening, larry. lots to cover. all week the nypd has been stepping up security at jewish institutions here in new york. it's a precaution, but the move
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comes amid those al qaeda-linked terror killings in france there is no specific threat here. but the nypd remains concerned about so-called lone wolf or copycat actors. security officials are also paying close attention to suspected iranian officers in the city. with the city's large jewish community, officials fear new york could become a target if things escalate with iran over the nuclear program. and nypd officials point to suspected surveillance of trains and bridges, the wall street exchanges and the city's heliports. on capitol hill today, one intelligence official testified how a dozen iran supporters have been questioned about alleged surveillance activities here, and a suspected iranian operative was charged here several months ago for allegedly plotting an attack on the saudi embassy in washington. and there have been overseas attacks on israeli diplomats. the iranian regime has denied any wrongdoing and points to attacks on its own nuclear
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scientists. nypd official says they're increasing their surveillance of possible iranian agents as a possibility, but they have their critics. numerous politician and civil liberties groups claim they have gone too far in conducting widespread surveillance in several communities. but nypd commissioner kelly says the efforts are meant to keep the city safe. larry? >> jonathan dienst, thank you very much very much. we're going to do stock work again with jimmy cramer's bonus pick. that's up next. and listen, housing. believe it or not, we get news today it's getting better. prices a stabilizing. all of that after the break. @@
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all right. let's do some stock market work. the dow 46. the s&p down 3. the nasdaq up a point. now jimmy cramer is here to tell us some companies are doing gangbusters because they are acquiring other companies. good evening, jim. >> lawrence, there is nothing like a market that instantly rewards companies that acquire other companies. going crazy today. buying activists, a generic drugmaker that was off of everybody's radar screen. how about zynga? how much does everyone love draw something? you've never heard of it? you never heard of omg pop, which they just stole for $2 million. i am seeing this company for what it is worth, world domination of the hot games out there. williams companies reported when it brought kamen eastern midstream. put two and two together, give them the benefit of the doubt,
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and voila, wealth creation. how about ups? the company is buying a competitor in europe. what happens? the stock goes to 52-week high. or how about this professional staffing company on assignment. this morning it shells out $600 million and the stock rallies over 20%. i hope american companies recognize this trend for what it is. if you buy, you can fly. still another reason why like this market. back to you, larry. >> all right. many thanks, jim cramer. appreciate the update. stocks finished mixed today, but the nasdaq reached a new 11-year high. let's turn to our savvy investors, talk about the markets and the economy. joining me, we welcome back liz anne saunders, chief investment strategist at charles schwab, and our friend michael farr, president of farr, miller and washington. welcome back. can i just start on the economy and profits and all the rest of it. we got some pretty decent housing numbers the last couple of days. and today existing home sales up 18% the last three months. and prices, okay, prices
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actually up a tad against a year ago. is housing getting better? is it going to be a positive contributor? >> i wrote a report a couple of months ago contending that housing had broadly bottomed. looking a it at a regional level. the bubble allowed it to be this national monolith, which is not the case anymore. i do think when you think of housing as a contributor to gdp, already residential investment was up in double-digits in the last gdp report. and i think that will continue to be the case. yes, i think it will be a pretty meaningful positive driver to gdp this year. >> all right. michael farr, get your take on housing. and i want you to add one, if you could. it's so related to housing. have gasoline prices damaged the economy? i don't see any evidence yet. what are you thinking? >> i think housing prices there is good news there in that the markets are beginning to clear. we still have a lot of inventory, but we're finding a price point where it's starting to move. as long as interest rates don't lift much higher, i feel encouraged about what is going
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on in the housing market. gasoline is not into the economy yet, but it's into the average consumer's pocketbook. they're paying more. they're grousing at the pumps. and soon they're going to have to make other choices for discretionary dollars. it's only a matter of time as we get close to $5 a gallon, that that becomes a headwind. >> liz ann, are you worried about that? is that in your model? >> i was more worried about it last year than this year. you have better jobs. you see consumer confidence numbers up. so i think there is so many different variables that work in favor of the consumer with natural gas prices down, a warmer winter, that i don't think we have hit anywhere near the breaking point yet. that's why i think you're not seeing it reflected in some of the consumer numbers. >> you sound pretty optimistic, elizabeth ann. >> i am. >> what are your favorite sector or how do we play your optimism, which i love, by the way. >> well, thank you. first of all, i'm a big believer in the notion of a manufacturing renaissance, which will have a
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domestic energy bias to it. right now we have a neutral waiting on energy because of uncertainty with geopolitics. industrials is a rate we have and technology has been a relatively long-standing outperform, and really think they're in the sweet spot of this economic second phase of recovery. >> michael farr, our pal dougie cass is very worried about profit margins. and he does correctly cite that unit labor costs have been creeping higher. they're up 3% year on year. profit margins are at a record high. are you worried they're going to slip and drag the market down? >> sure. if there is one mean reverting piece of datum out there, there are profit margins. they've been running hot. we expect them to be around the 8% level. so even though you have a market with sign of a reasonable price to earnings multiple right now, maybe it's not quite as cheap if the margins come down a bit.
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liz ann, who i follow closely and think is brilliant. but liz ann, i'm kind of concerned about the consumer out there. do they really have the power for an organic expansion? has employment improved enough? and have they deleveraged enough to really drive the economy from demand point of view? >> look, i think consumption will probably track not much better than income growth. so that is a driver of gdp is one of the reasons why i think gdp will still stay relatively constrained. you just have to look for where the pockets of strength are. the latest service date that on the debt service ratio puts it in the low debt service zone, which is a zone which we've gotten about 7% nominal gdp growth in the past and 5% real gdp growth there are other factors that go into it. i think we have made a meaningful dent. still have a ways to go in deleveraging. but the private sector has been pretty herculean in its efforts. the public sector, we're not there yet. but the private sector has done a pretty good job in the last
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few years. >> i want you to both weigh. in ben bernanke yesterday speaking to the college kids at george washington university, raising of course his historical work on the great depression. bernanke is still worried like during the great depression you had a double dip in 1936-1937. bernanke is still worried about that today. do you think he will keep the zero interest rate for as far as the eye can see, liz ann? >> to the end of 2014? i don't think so. if you look at the fed funds future, it actually has a high likelihood of the first hike coming about a year earlier than that. i'm not going to forecast when they're going to do it there is also other levers they can pull before they attack feds funds rate. so it's changing the rate on interest on reserves or starting to pare back the balance sheet. so whatever their first move or sets of moves are going to be, i think it's likely to happen before the end of 2014. >> all right. >> but there are two linchpin there's, if i may. one is what congress will do after we get past of november in
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terms of tightening or increased taxes that could kind of consult some of this recovery. and i think europe continues to be one of those factors out there that could get bernanke back with his hand on the accelerator. >> i think as long as the dollar stays and holds up, that he can continue the zero interest rate, at least for a while longer. i think the greenback is the key. anyway, we got to jump. liz ann sonder, thank you very much. michael farr, thank you very much. next up on "kudlow," bosses want your facebook pass word before they hire you. now one lawmaker is stepping in and wants to make that against the law. much more "kudlow" after the break. nice morning, scott? aye, or...a mornin' of tiny voices crying out, "feed us -- we've awakened from our long winter's nap and we're peckish to the point of starvin'"!!
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some key headlines tonight. as bosses from coast-to-coast push to force employees and perspective employees to give up facebook pass words so their sites can be checked, new york state assemblyman jeffrey denowitz is pushing to make that illegal. sony expected to announce changes to its hierarchy. now that sir howard stringer is being moved to chairman, michael linton, head of sony pictures expected to take on the title of ceo of sony corporation of
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america. shares are up 15% in three months. have you tweeted today? i have at "the kudlow report," and also larry underscore kudlow. it's twitter's birthday, six years old today, has 140 million active users, including me. the new york jets are trying to get star tim tebow, but there is a snag. espn says both sides are bickering over language in tebow's contract. coming up, a cnbc investigation. if you're pro america and support our troops, this will absolutely outrage you. plus, caught on tape. an american on his way to prison after getting caught trying to sell spy secrets. that story up next. [ dog barks ]
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appears buster's been busy.
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[ man ] yeah, scott. i was just about to use... that's a bunch of ground-up paper, lad! scotts ez seed uses the finest seed, fertilizer, and natural mulch that absorbs and holds water better than paper can. looking good, lad! thanks, scott. ez seed really works. so, how come haggis is so well behaved? 'cause he's a scotty. oh. scott: get scotts ez seed. it's guaranteed. seed your lawn. seed it! a defense contractor sentenced to 13 years in prison for trying to sell defense secrets. now for the first time hidden camera video of his betrayal to his country has been released. cnbc's eamon javers is back with us from washington, d.c. hello again, eamon. what is up with this one? >> hi, larry. american contractor stewart nozette seemed to visit all.
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a degree from mit and a satellite now displayed in the smithsonian's air museum. he worked in the lawrence laboratory and on the star wars defense system. but apparently he didn't think he had enough money. the government says in a 2009 meeting at the mayflower hotel in downtown washington, he offered to sell some of america's most sensitive secrets to a man he thought was an agent of the israeli mossad intelligence service. but that man was actually an undercover fbi agent. and in a court hearing today, the government showed publicly the hidden camera video of nozette's meeting with the spy. >> okay. so i gave you this first run some of the most classified information that there is. >> okay. >> you know. so i'm in a -- i've sort of crossed the rubicon. >> uh-huh. >> in the sense that i can't go back and take a polygraph now. so i'm yours. i've made the commitment.
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>> now later nozette negotiated the price that he thought the mossad should pay him for those secrets. >> at least 200 million, so i would say theoretically, i could charge you certainly, you know, at most 1%. >> now larry nozette was arrested right in that mayflower hotel room shortly after the fbi made the recording. today he was sentenced to 13 years on attempted espionage, fraud, and tax charges, larry. >> eamon, any evidence that israel was actually involved at all in this case? >> no. in fact the government is not alleging that israel had anything to do with this, just that nozette thought he was dealing with the israeli mossad. actually he was dealing with an undercover fbi agent, larry. >> right. eamon, you have another big story tonight regarding american veterans? >> yeah, that's right, larry. at least on paper, two mortgage brokers in georgia became instant millionaires last week
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with jpmorgan's settlement of their whistle-blower settlement against the bank. we flew down to atlanta to find out more about a scam that allegedly involved charging improper attorneys fees to veterans in a va home mortgage assistance program. they said it was simple. the banks simply hid the improper fees on another line of the settlement documents. i asked them when they first spotted the alleged fraud. >> when we found it, to be quite honest with you, we contacted a couple of lenders and addressed the situation with them. and they said no, we're doing it the right way. you're supposed to do it that way. just keep doing what you're doing. >> it was industry standard? >> yeah. >> how much money do you think the veterans actually paid that they shouldn't have paid? >> well, there is -- i think in the past ten years there has been over 1.2 million of these loans written. you know, and you've got anywhere between 300 and $1500 per loan.
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so do the math. it's astronomical. >> it adds up pretty quick. >> yes. >> you guys would be very rich men at the end of that. how does that change your life? >> it changes it a lot. it takes a lot of pressure off. that's for sure. i mean we've been living with unbearable pressure for six years. feels like we've been in a cooking pot for six years in not being able to say anything or trying our best to stop the fraud from the inside out. so, yeah, it's a big relief just getting that monkey off our back, that's for sure. >> you're saying that the banks know this case has been filed, and you're saying that the fraud is still going on? >> it is still continuing, yes. >> how is that possible? >> i don't know how it's possible. i guess it's just not enough oversight. a lot of people in industry don't maybe understand what is going on and how to correct it. it's a simple fix. but for some reason, it hasn't been done by the agencies that should be looking at this. >> now larry, last week we talked to jpmorgan about this case. they said they would have no comment on it.
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but you should know that these two whistle-blowers have cases pending against as many as a half dozen other banks. so the payout they got last week may not be the last payout for the both of them. larry? >> all right, eamon. thank you very much. next up this evening, after mitt romney takes illinois big time, is it time for the rest of the pack to hang it's up? see what william f. buckley, the famed conservative and my former boss, see what he would have said, right after the break. buckley on "kudlow," and then we discuss. they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪ and what it doesn't cover can cost you some money.
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welcome back to "the kudlow report." when talking about republican primaries, william f. buckley said it best in what later became known as the buckley role. i quote from my former boss. the wisest choice would be the one that can win. no sense running mona lisa in a beauty contest. i'd be for the most right, viable candidate who could win. all right. question. is the republican party now taken bill buckley's advice to heart? let's bring in matt lewis, jim pethokoukis of the american enterprise institute and kevin williamson, national review department managing editor. first point, i'll go to you, kevin. is mitt romney -- he won big last night. i got that. >> sure. >> is he the most conservative guy who can win? is that what is happening? >> i think by default, because i think he is probably the only guy in the field that could win. as much as i like rick santorum,
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i think he was a good senator when i was in pennsylvania, i liked having him there, it's impossible for me to imagine a country that elects rick santorum as president. newt gingrich? not going to happen. ron paul? kind of love it to happen myself. it's not going to happen. who do you have out there to run against a guy like romney? he is reasonably conservative. he doesn't have that kind of smell to him of being conservative. he is not a movement guy. he is not a guy that spends reading hayek in his spare time. >> ooh. >> he is not a winger in his soul, but he is basically a conservative guy who is a sensible guy with a reasonable kind of agenda. >> but winger might not be out of the wind. he had a big win in illinois. more important, his speech was superb. and it was a conservative moral defense of free enterprise, economic freedom, free market capitalism, which plenty of jabs against professor obama. now, does that speech shift anything? does it move him forward?
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does it bring conservatives back into his camp? >> what kevin said, he may not have read but he has lived that. romney is at his best when he is talking about barack obama, professor bob, the feartician, if person who have made have read but never experienced it. when he shows the difference between someone who has lived and worked in a real economy. >> and praises it. and the rewards. and the successes. >> and he is is not shy about it. >> professional obama doesn't get this. he taxes. he regulates. he just doesn't understand. is that the campaign speech for the general election? is that what you heard last night? >> i think it is. it goes beyond have i this tax plan, or i have a premium support for medicare. he is creating a broader issue that this is where the country is going, economic freedom, entrepreneurial capitalism. all that is at risk with four
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more years of obama. >> rush limbaugh put it well. maybe romney is simply the most conservative guy who can win this election, and he is in fact more conservative than you think. >> unless we get this, you know, crazy broker convention where paul ryan or something. >> put that aside. >> i'll concede that that probably won't happen. >> that's over now. >> i think the problem that conservatives have is that they're so afraid that they're being sold a bill of goods that once again wearing going to have somebody -- especially 2010 was this amazing year where the tea party and grassroots conservatism seemed to prevail. and two short years later to wind up with mitt romney? desperately afraid he is going to turn on them. and by the way, something that happened just today, a top aide to mitt romney during his cnn interview talked about this being an etch a sketch. that once the general election
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starts, you can basically shake and all the issues are going to change. a lot of conservatives are worried that once mitt romney becomes the nominee, he is not going to be quite so conservative. >> but romney endorsed paul ryan's new budget, which has some brutal cuts in it. i mean i totally favor it. but in addition to supply side tax reform, he whacks medicaid. he whacks food stamps, what unemployment compensation. tough budget. romney i think fearlessly endorsed it. what does it tell you? >> it tells me that we don't necessarily have to have a visionary or a crusader or somebody who's that a burning desire in his heart to do that thing, all we need is somebody to sign paul ryan's budget into law. and mitt romney can be that guy. actually it's probably easier for someone like romney who is going to be less polarizing than someone who is a hard-core idealogue. he can sign that budget and make it more palletable to the rest of the country. >> he can actually sale it. >> he can sell it. >> go ahead.
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>> the vision is there. now he just needs someone who can execute it. >> i want to add it's not all roses. doesn't he still have to -- for the whole country, have to clarify romney care and obamacare? obamacare is extremely unpopular, even to this day, two years into it, 55% oppose the darn thing. does romney have a lot more work to do on that? >> uthey're exactly the same thing, that romney care and obamacare are exactly the same thing. >> so what does he do with that? >> one thing that romney care doesn't have that obamacare does have, which is this panel of elite bureaucrat medical care rationers, which is where sarah palin partly got the death panel idea, talk about that. because remember, there are these cost controls in this obamacare which will lead to rationing that aren't there. that's what he needs to focus on. >> i just noticed real quick, we're running out of time. he did pick up under 50,000 incomes last night. he also picked up catholics.
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he picked up tea parties and freedom works. the tea party endorsed them. that's a heck of a thing. >> and jeb bush endorsed him today. i think you're going to start to see more and more establishment republicans more or less coalesce around him. ultimately a long way to go still. >> all right. jimmy p., kevin williamson and matt lewis, thank you. mitt romney, a heck of a night. keep defending free market capitalism. that's it for this evening's show. thanks for watching. i loved it.
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The Kudlow Report
CNBC March 21, 2012 7:00pm-8:00pm EDT

News/Business. Larry Kudlow. Economic news and interviews. New.

TOPIC FREQUENCY Romney 14, America 8, Obama 7, Us 6, U.s. 5, Kudlow 5, New York 4, Iran 4, Michael Farr 4, Scotts 4, Illinois 4, Washington 3, Morris 3, Sony 3, Paul Ryan 3, Michael Steele 3, Liz Ann 3, Rick Santorum 3, Unitedhealthcare Insurance Company 2, Hertz 2
Network CNBC
Duration 01:00:00
Scanned in San Francisco, CA, USA
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Tuner Virtual Ch. 58 (CNBC)
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on 3/21/2012